Your Survival Guy

Preparing your investments and family for when disaster strikes.

Disclosure

Are Unions Even Helpful to Workers Anymore?

By

By kuzmafoto @ Shutterstock.com

Employees join unions for two reasons; The first is that in many states they are forced to if they want certain jobs. The second is that they believe in some cases that union membership will benefit them financially.

Perhaps it used to be the case that a union membership was a guarantee of a dependable pension and good benefits. Today though, joining a union for the big promises of a better retirement might be participating in a bout of collective hysteria.

I’m not against unions, but I am against union leaders who lie to members about the reality of what union membership means. The National Right to Work Committee shows that unions hurt members when leadership makes promises that cannot be delivered on. The NRTWC writes in its February newsletter:

Organized Labor-Controlled Funds Have Been Appallingly Mismanaged

Roughly a year after being sworn in as America’s 45th President, Donald Trump is coming under increasing pressure to defuse a number of policy “time bombs” planted by his predecessor during his second term in office.

And one of the most seemingly intractable of these “time bombs” pertains to an estimated $600 billion in unfunded promises made by private pension plans controlled by Big Labor, either exclusively or in partnership with unionized employers. (The jointly controlled benefit funds are commonly referred to as “multiemployer” pension plans.)

Hundreds of union and “multi-employer” plans are in deep trouble primarily for one reason:  The contributions going into these funds, in amounts determined through union monopoly bargaining, were never realistically sufficient to pay for the pensions that union bosses and their agents told workers they would provide.

Today’s Crisis Stems From A Law Signed by Barack Obama in Late 2014

Although the long-term outlook for “multiemployer” plans like the Teamsters Central States Pension Fund (CSPF) is very bleak, relatively few are poised to go bankrupt during the Trump Administration.

But Mr. Trump nevertheless faces a crisis in 2018 because of the so-called “Multiemployer Pension Reform Act,” championed in a lame-duck Congress by soon-to-be ex-Senate Majority Leader Harry Reid (D-Nev.) and signed by Barack Obama just over three years ago.

Under the MPRA, which altered more than 40 years of labor law, pension plans that are classified as “critical and declining” are potentially eligible to reduce benefits by 30% to 65%, without ever having to file for bankruptcy.

So far, three union-controlled pension plans have succeeded in slashing benefits with the MPRA’s help.

Most recently, the Teamsters New York State Conference Pension and Retiree Fund (NYSCPRF) cut most retirees’ benefits by 29% and active employees’ benefits by 18% last August.

National Right to Work Committee Vice President Matthew Leen commented: “Well over a million other unionized active employees and retirees now realize that, unless the legal landscape changes, their benefits could be targeted for major, MPRA-authorized reductions in the near future.

“Understandably, current and future retirees who are in troubled, Big Labor-dominated plans are turning up the pressure on Congress to find a way to ensure that their pensions are fully or nearly fully funded.”

Read more here.

The following two tabs change content below.
My Twitter profileMy Facebook profileMy Instagram profile

E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.